January 2, 2007 -Fairchild Semiconductor aims to make a splash in the market for AC/DC offline power conversion applications, with a $200 million tender offer for System General Corp., a Taipei-based supplier of analog power management semiconductors.
The companies would combine their power conversion businesses into a single unit targeting worldwide AC/DC offline power conversion applications, a $1.5 billion market in 2005 encompassing isolated PWM controllers, PFC controllers, and AC/DC offline regulators, the companies noted. System General would become a wholly owned subsidiary with its approximately 250 employees, including the current management team. The deal, pending approval by System General’s shareholders, could be completed by the end of 2Q07.
Mark Thompson, Fairchild’s president and CEO, said the deal was part of ongoing efforts to “invest aggressively to expand our sales and margins by pursuing fast-growing power analog markets.” He noted that the Asia region accounts for two-thirds of the power management IC market, with six of the top 10 power IC OEMs are in Taiwan.
He added that the combination is synergistic, with System General strong in PWM controllers in Taiwan and China, while Fairchild is a leading provider of AC/DC offline regulators in Korea and China. Fairchild will continue building upon System General’s R&D center in Taiwan, he noted.
System General’s net revenue through the first eleven months of 2006 was approximately US $35 million. Fairchild’s 2006 revenues are expected to be about $1.65-$1.66 million, with 4Q sales projected to be flat to +2% from the prior quarter.